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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Bruce L who wrote (27694)	2/5/1999 2:22:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 45548

I more than doubled down on Feb 40 calls at 7/16...avg $1.05 now

To: Bruce L who wrote (27694)	2/5/1999 2:31:00 PM
From: bgg	Read Replies (1) \| Respond to of 45548

Bruce -- Few counterpoints: 3Com's earnings are not virtually the same as CSCO. There's more than a $1 billion difference per quarter, and Cisco's profitability is FAR superior. 3Com's gross margins are in the mid- to high-40s. Cisco's GM is 65%. Cisco has a far superior presence in the service provider and carrier markets, where the real future growth is. 3Com must rely almost solely on partnerships in this area. So, why do you think Cisco's market cap is so much higher? The Street believes that Cisco's future growth prospects are far better than 3Com's. There's no comparison. 3Com is certainly a good company in a very good industry. Problem is, they don't nearly have the growth prospects of a Cisco. 3Com is strong at the edge and in small-to-medium businesses. Problem is that the products sold into these areas either are, or are quickly becoming commodity items subject to extreme pricing pressures. Plus, Cisco has gone from next to nothing to over $2 billion in sales to the small-to-medium segment. Who else but 3Com would be the most affected? Cisco grew at about 40% year over year. 3Com grew at 29%, and the next quarter is supposed to be soft, flat sequential growth. Chambers is a salesman, but you really can't call him a hypster when it comes to working with the Street. Cisco is a very conservative company, and if you listen to their conference calls, you don't hear much hype. He may come across as a hypster only because he's calling Cisco's dominance "like it is." Finally -- mind citing who picked 3Com as a top 3 company to work for in the world? I've seen Cisco in listings, like Fortune's top 50, but I've never, never seen 3Com mentioned in such as listing. Remember, under Eric B., 3Com reduced its workforce last year to help cleanup after the USR acquisition.